By Tim Keogh

The start of 2021 has brought several changes with the new year; a fresh administration takes up the mantle of Government in the United States, the Perseverance lands on Mars, and vaccinations begin against the COVID-19 pandemic. The new Biden Administration has to-date brought in several sweeping policy changes for the US; one of these being a heightened commitment to action against climate change – symbolised by the US re-entering the Paris Climate Accord.

The Paris Climate Agreement, which entered into action in 2016, is a legally binding international treaty on climate change that calls for countries and businesses to do all they can to limit global warming to 1.5 degrees Celsius, compared with pre-industrial levels. The initiative has now been active for five years, and two important questions must now be answered: How successful has the Paris Climate Agreement been over its five-year history, and how are leading businesses and thought leaders seizing the opportunities it provides for innovation and positive change?

As of 2018, over 100 companies had committed to using science-based targets to align their strategies with the Paris Agreement. Such strategies range from engaging with carbon offsetting initiatives to bring carbon emissions to net-zero, to implementing change across value chains or operations in order to reduce or eliminate emissions. Additionally, companies are engaging with their industries to influence wider change; in 2019, Shell announced that it was leaving American Fuel & Petrochemical Manufacturers, an influential oil-industry trade lobby, citing the group’s lack of support for the Paris Agreement. For such big industry players to engage with their own sectors in this manner is a credit to the impact that the Paris Agreement is having on the business community – drawing attention to the sustainable conduct that companies are demonstrating and providing a clear goal for all to work towards.

The United States had previously pulled out of the Paris Agreement in November 2020, under orders from then-President Donald Trump dating back to 2017. This decision, made in response to what the Trump administration described as an “unfair economic burden” on American workers, businesses and taxpayers, caused a great deal of controversy; with business leaders themselves from companies such as Royal Dutch Shell, Total, Apple, Google and Goldman Sachs coming together to issue a statement calling for the US to remain in the initiative, arguing that “the Paris Agreement will strengthen our competitiveness in global markets, positioning the United States to lead the deployment of new technologies that support the transition, provide for our workers and communities, and create jobs and companies built to last.” Incoming President Biden would go on to enact legislation to ensure the place of the United States in the Paris Agreement on his first day in office.

It is becoming clearer that sustainability is a growing concern for businesses today, and that the Paris Agreement is ushering in new industrial expectations in order for its goals to be met. Businesses are committing in large numbers to the goals of the initiative and, five years after its launch, attention is still firmly upon it. It remains to be seen if society, governments, and businesses can come together and achieve the goal of 1.5 degrees Celsius; however, with the Paris Agreement receiving widespread support and engagement from businesses, it seems likely that other sectors will follow.